Working capital is an essential part of cash flows. So it plays an important part in the estimation of cash flows. Its impact on valuation is quite significant in many situations.
This page discusses this question: Is short-term debt showing up as part of current liabilities included in working capital when estimating cash flows in a DCF valuation?
No, short-term debt should not be included in working capital when estimating cash flows in a DCF valuation. Shor- term debt is an interest-bearing liability and so should be considered as debt. Only non-interest-bearing liabilities such as accounts payables, supplier credit, accrued expenses such as rent, salaries, etc. should be part of current liabilities.